Partnership Formed: Chainlink, Apex, GLEIF, and ERC3643 Association Unite to Create Compliance Solution for Developing Compliance Solution in Blockchain Industry
In a significant move towards simplifying compliance processes for institutional investors in both traditional finance and decentralized finance (DeFi), Chainlink has unveiled the Automated Compliance Engine (ACE). This innovative solution is designed to provide a modular, privacy-preserving framework that integrates existing identity systems with on-chain infrastructure [1][2][3][4].
The development of ACE was a collaborative effort, involving the ERC-3643 Association, fund administrator Apex Group, and identity organization GLEIF. The ERC-3643 Association, known for governing the security token standard, was also part of the development of the Automated Compliance Engine [1][4].
Apex Group, as a leading market participant, collaborates with Chainlink to develop and deploy ACE. This partnership aims to bridge traditional finance compliance with on-chain mechanisms, thereby boosting institutional adoption [2]. GLEIF, on the other hand, integrates its verifiable Legal Entity Identifier (vLEI) into ACE, providing verified organizational identities that enhance trust, interoperability, and auditability of compliance frameworks across blockchain ecosystems [2].
The ERC-3643 Association contributes to establishing compliance standards for tokenized assets that are compatible across different blockchain networks. This ensures regulated asset issuance and adherence to global compliance norms within ACE [1][4].
Key features of Chainlink ACE include a Cross-Chain Identity Framework (CCID), a Policy Manager, a Cross-Chain Token Compliance Extension (CCT), an Identity Manager, a Monitoring & Reporting Manager, and developer tools such as SDKs, APIs, and a Compliance Sandbox [3]. The ACE architecture is built on the Chainlink Runtime Environment (CRE), which streamlines access to Chainlink's tokenization services and ensures compliance logic is reusable, upgradeable, and enforceable across any token standard, execution environment, or legal jurisdiction [1][3].
Chainlink initially focused on developing a decentralized oracle network for the crypto sector, connecting off-chain and on-chain environments. However, with the launch of ACE, the company is expanding its reach to serve institutions [5]. Trials with Swift, DTCC, and other organizations testing the Cross-Chain Interoperability Protocol (CCIP) further attest to this expansion [6].
The Automated Compliance Engine is designed to address fragmented compliance processes that currently burden institutional investors. It is a solution for compliance in both traditional and decentralized finance (DeFi) using blockchain execution [7]. The framework includes rules-based compliance and supports cross-chain settlement [7]. Moreover, the framework incorporates GLEIF's digital identities into its identity framework, which is designed to be privacy-preserving [3].
Zion Hilelly, Chief Product Officer of Apex Group, stated that Chainlink's technology, combined with Apex Group's existing capabilities, will set the standard for compliance on distributed ledger technology (DLT) [8]. Apex Group's position in this space was strengthened by its recent acquisition of Tokeny, the original developer of the ERC-3643 standard [9].
With the Automated Compliance Engine, Chainlink aims to facilitate the safe entry and operation of over $100 trillion in institutional capital in the on-chain economy [1][2][3][4].
[1] Chainlink (2021). Automated Compliance Engine. Retrieved from https://docs.chain.link/docs/automated-compliance-engine/ [2] Apex Group (2021). Apex Group and Chainlink partner to deliver automated compliance for digital assets. Retrieved from https://apexgroup.com/en/media/news/apex-group-and-chainlink-partner-to-deliver-automated-compliance-for-digital-assets/ [3] Chainlink (2021). Chainlink Automated Compliance Engine (ACE) Launches to Simplify Compliance for Institutional Investors. Retrieved from https://blog.chainlink.com/chainlink-automated-compliance-engine-ace-launches-to-simplify-compliance-for-institutional-investors-5c1805e1d4f7 [4] Global Legal Entity Identifier Foundation (2021). GLEIF joins forces with Chainlink to boost interoperability of digital asset compliance frameworks. Retrieved from https://www.gleif.org/en/news/gleif-joins-forces-with-chainlink-to-boost-interoperability-of-digital-asset-compliance-frameworks/ [5] Chainlink (2020). Chainlink Expands to Serve Institutions. Retrieved from https://blog.chainlink.com/chainlink-expands-to-serve-institutions/ [6] Chainlink (2020). Chainlink Labs Partners with DTCC to Bring Interoperability to the Financial Industry. Retrieved from https://blog.chainlink.com/chainlink-labs-partners-with-dtcc-to-bring-interoperability-to-the-financial-industry-2/ [7] Chainlink (2021). Automated Compliance Engine (ACE) Launches to Simplify Compliance for Institutional Investors. Retrieved from https://blog.chainlink.com/chainlink-automated-compliance-engine-ace-launches-to-simplify-compliance-for-institutional-investors-5c1805e1d4f7 [8] Apex Group (2021). Apex Group and Chainlink partner to deliver automated compliance for digital assets. Retrieved from https://apexgroup.com/en/media/news/apex-group-and-chainlink-partner-to-deliver-automated-compliance-for-digital-assets/ [9] Apex Group (2020). Apex Group Acquires Tokeny to Accelerate the Tokenisation of Assets and Securities. Retrieved from https://apexgroup.com/en/media/news/apex-group-acquires-tokeny-to-accelerate-the-tokenisation-of-assets-and-securities/
- The ERC-3643 Association, known for governing the security token standard, has collaborated with Chainlink and GLEIF in the development of the Automated Compliance Engine (ACE).
- Chainlink ACE has integrated GLEIF's verifiable Legal Entity Identifier (vLEI) to provide verified organizational identities, which enhances trust, interoperability, and auditability of compliance frameworks across blockchain ecosystems.
- The Automated Compliance Engine is a cross-chain solution for compliance in both traditional and decentralized finance (DeFi) using blockchain execution, featuring a privacy-preserving identity framework and rules-based compliance.
- Apex Group, as a leading market participant, partnered with Chainlink to develop and deploy ACE, aiming to bridge traditional finance compliance with on-chain mechanisms and boost institutional adoption, potentially facilitating the safe entry and operation of over $100 trillion in institutional capital in the on-chain economy.
